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Will Cigna (CI) Beat Q1 Earnings Estimates This Time Again?

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Cigna Corp.’s (CI - Free Report) first-quarter results scheduled on May 3, 2018, should show strong performance across each of its priority growth platforms – Commercial employer, U.S. seniors, Global Supplemental Benefits and Group Disability & Life.

Moreover, Cigna’s results should reflect growth in medical customers and specialty relationships, continued effective medical cost management, operating expense discipline and accretion from a low tax rate.

Its segment Global Healthcare is expected to deliver a strong performance in the first quarter driven by strength in its commercial employer business, driven by continued benefits from organic customer growth, specialty contributions and effective medical cost management as well as continued solid performance in its Medicare advantage business. The Zacks Consensus Estimate for revenues from this segment are $8.7 billion, up 6.4% year over year.

Another segment, Global Supplemental Benefits should show business growth and continued strong operational performance. We expect the segment to grow on the back of its leading innovations, direct-to-consumer distribution capabilities, and easy to understand, affordable products that are designed to fill in gaps in coverage and locally licensed and strongly managed talent. Its business in South Korea has been performing well and should contribute to the results. The Zacks Consensus Estimate for revenues from this business is $1.05 billion, up 15.5% year over year.

Cigna has been witnessed growth in its membership for the past many quarters and the trend continued in the first quarter of 2018, given its diversified product portfolio, a wide agent network and superior service. Enrollment gains are expected in its Commercial insurance and government plans. The Zacks Consensus Estimate for total membership is 16.23 million lives, up 3.2% year over year.

Share repurchases made by the company in the first quarter will aid its bottom line.  In January 2018, the company repurchased 1.2 million shares of common stock for approximately $260 million.

Earnings Surprise History

The company boasts an attractive earnings surprise history, having surpassed estimates in each of the trailing four quarters, with an average positive surprise of 13.6%. This is depicted in the chart below:

Cigna Corporation Price and EPS Surprise

Why a Likely Positive Surprise?

Our proven model indicates that chances of Cigna beating the Zacks Consensus Estimate are high as it has the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: The Earnings ESP for Cigna is +0.62%.

Zacks Rank: Cigna has a Zacks Rank #3 (Hold), which increases the predictive power of ESP.

Other Stocks to Consider

Here are some other companies that you may consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:  

Envision Healthcare Corp. is expected to report first-quarter 2018 earnings results on May 7. The company has an Earnings ESP of +0.52% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Radius Health, Inc. (RDUS - Free Report) has an Earnings ESP of +4.2% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on May 10.

Select Medical Holdings Corp. (SEM - Free Report) has an Earnings ESP of +3.7% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on May 3.

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